Auckland real estate prices have reached their highest level in 32 months, according to November sales data released by the Real Estate Institute of New Zealand.
Auckland city set a new record median high of $1.03 million, $50,000 higher than its previous high of in March 2017. Volumes were up 21 percent on October and 4 percent on last year.
But prices in North Shore decreased 6.2 percent, but Papakura and Waitakere prices grew over 5 percent on a year ago, Rodney is up nearly 2 percent. Manukau and Franklin held steady. Volumes were well up in all parts of the city except Rodney.
Across the country, median prices reached a new record high of $630,000, up 8.6 percent on last year.
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The biggest jumps were in Southland and Nelson, both up over 16 percent, while Otago and Hawkes Bay saw price growth of 14 percent on last year. The only drops in value were in Northland, down 1.2 percent and Tasman, down 3.7 percent.
“The Auckland market has seen prices increase for three months in a row, suggesting that we’re now entering a new normal for the country’s biggest real estate market,” says REINZ chief executive Bindi Norwell.
She attributes this to increasing levels of confidence in the property market coupled and low interest rates, noting that a lack of choice of new listings means that people are prepared to pay more for properties than they were a few months ago.
In the Waikato, many districts saw record median prices, but inventory was down an alarming 17.4 percent. Holiday area buyers in the Coromandel Peninsula will be feeling the pinch with new listings down 27.8 percent, the largest drop in the country.
Norwell says agents are anticipating a good summer.
“There have been a few vendors who have been holding out for higher prices, but generally vendor expectations are meeting the market. There continues to be a lot of multi offers presented, due to the lack of lower priced properties on the market.
“We’ve also seen fewer attendees at open homes due to a decrease in auctions scheduled. However, we are still receiving good interest in the number of people wanting appraisals, ready to go to market next year.”
The record median price of $700,000 in Tauranga was prompted by an increase in the number of $750,000 sales, but sales volume are still down 7,8 percent. The same pattern of record prices and lower volume is apparent in Hawkes Bay, Manawatu and Taranaki (the lowest volume there since November 2014) driven by some of the lowest inventories of houses for sale ever seen.
Christchurch saw a slight pick-up in listings on last month, still down on last year, and reached a record median price of $468,000.
But in Queenstown lakes, fewer foreign buyers have meant a dip in median price by 4.5 percent to $945,000 and days to sell dragging out to 51 days this November compared to 33 days last year. But despite the lack of listings, sales volumes were up 22 percent on a year ago.
While sales volumes in Auckland were up by 8.7percent on last year to 2335, across the country they were down to 7405 – better than the winter low, but 1.9 percent down on last year. Only Waikato and West Coast saw volume increases year on year.
This is blamed squarely on a shortage of listings, and that will continue through the summer.
REINZ expects that with more than 9,000 fewer listings than in 2018 and more than 13,000 fewer listings than in 2017, sales volumes will stay low. Across the country, inventory of listings is down 19.4 percent – that’s 5312 fewer properties on the market than last year.
“We’re beginning to hear anecdotal evidence from agents around the country that with the ongoing lack of listings which has led to rising median prices, that we’re now starting to see the gap widening between vendor expectations and what purchasers are willing to pay for a property in some parts of the country,” Norwell says.
Not surprisingly, growing demand and shortage of stock has meant days to sell have dropped to 35 in Auckland, 33 in the rest of the country.
Auctions are now up to 32.5percent of sales (from 25 percent last year), and around New Zealand they are up to 17.1 percent, the highest in two years.
The price increase means that only 31/5 percent of sales are in the first home under $500,000 segment, while million dollar plus sales have surged to 16.8 percent of sales up from 14.7 percent a year ago.
Norwell predicts a good summer for Auckland:
“The Auckland market should remain strong in the first two quarters of next year, however, with 2020 being an election year, the market may typically be conservative towards the second half of the year.”
